The chauffeured transportation industry is an image business. In this line of work, we are constantly surrounded by ostentatious displays of wealth. We are exposed to the very rich and flamboyant in both the entertainment world and in the corporate arena. It’s little wonder that the majority of us believe that “Life is a series of trade-ups from one level of luxury to the next.” In other words, the more we make, the more we’re supposed to spend to increase our social status.
Guess what? This line of thinking is what keeps most of us on the work-and-consume treadmill for the rest of our lives. If you want to become financially independent and don’t have a large inheritance to look forward to, you should mirror the mentality of the real millionaires in this country – those people with high net worth rather than those who possess a lot of “things.”
According to Thomas Stanley, co-author of The Millionaire Next Door, “Most people have it all wrong about wealth in America. Wealth is not the same as income. If you make good money each year and spend it all, you are not getting wealthier. You are just living high. Wealth is what you accumulate, not what you spend.”
People who are “self-made” work hard and exercise extreme self-discipline when it comes to spending. Most independently wealthy people own a small business, drive regular (or used) cars, invest as much of their pre-tax dollars as possible, raise their children conservatively (but tend to spend on education) and above all, reject the big spending lifestyles that most of us associate with rich people. Did you know the credit card most commonly used by millionaires is a Sears card? The least used is a Platinum American Express.
Are you as wealthy as you should be? If you’d like to assess your net worth multiply your age times all sources realized pretax annual household income, except inheritances. Divide by ten. This, less any inherited wealth in what your net worth should be. If you find your net worth is low buy you have the desire to become financially independent, then you need to readjust the way you think about money.
Wealth-building only happens when you place a higher importance on financial independence than on displaying lofty social status.
If you have a high net worth, congratulations! You’ve figured out that it is smarter to capitalize and cash-in on pretentiousness, rather than trying to emulate it.